- 20-Year Capacity Agreement With Italian Firm Slated to Begin in 2008 - Involves Approximately One-Third of Terminal's Total Capacity
SAN DIEGO and MILAN, March 8, 2005 (PRIMEZONE) -- Sempra LNG, a unit of Sempra Energy (NYSE:SRE), today announced it has signed a Heads of Agreement (HOA) that provides Eni S.p.A. (NYSE:E), one of the world's leading oil and natural gas exploration and production companies, with approximately one-third of the capacity of Sempra LNG's Cameron LNG receipt terminal under development near Lake Charles, La.
The non-binding HOA contemplates finalizing a definitive 20-year terminal services agreement by mid-2005.
Under the proposed agreement, Sempra LNG will provide Eni between 400 million cubic feet per day (MMcfd), or 4.1 billion cubic meters (Bcm) per year, and 600 MMcfd, or 6.2 Bcm per year, of capacity in the company's Cameron LNG receipt terminal. Upon its completion in 2008, Cameron LNG will have an initial sendout capacity of 1.5 billion cubic feet per day, or 15.5 Bcm per year, of natural gas.
"This new relationship with one of the world's leading oil and natural gas companies marks another significant step in our corporate LNG strategy," said Darcel L. Hulse, president of Sempra LNG. "We look forward to concluding the definitive terminal service and supply agreements involving Cameron LNG in the near future, so that we can begin delivering new gas supplies through the facility in 2008."
On Jan. 27, 2005, Sempra LNG announced it signed an HOA providing Tractebel LNG North America LLC (Tractebel LNG NA), one of the business divisions of SUEZ (NYSE:SZE), with between 325 MMcfd and 500 MMcfd of capacity of the Cameron LNG receipt terminal. That non-binding HOA contemplates finalizing a definitive 20-year capacity agreement by June 30, 2005.
Cameron LNG is located near the Gulf Coast along the Calcasieu Ship Channel, about 15 miles south of Lake Charles. The project has received the "authority to construct" from the Federal Energy Regulatory Commission and is slated to begin construction later this year.
Cameron LNG is expected to be interconnected with U.S. interstate and intrastate pipelines. These pipelines will have up to 10 billion cubic feet per day of downstream capacity to the Midwest, Southeast, Atlantic and Northeast markets.
Another Sempra LNG project, Energia Costa Azul, is designed to help Baja California, Mexico, meet its long-term energy needs, while, at the same time, providing significant supplies to the U.S. market. It will be the first major LNG receipt terminal built on North America's West Coast. Sempra LNG is the sole owner and operator of Energia Costa Azul. The company has signed a 20-year agreement with Shell International Gas Limited for half of the facility's capacity, or 500 MMcfd. The remaining capacity will be utilized to send out 500 MMcfd of regasified LNG, which Sempra LNG has procured from Indonesia's Tangguh LNG project. Construction at Energia Costa Azul has commenced and is scheduled to begin operation in early 2008.
LNG is natural gas that has been cooled below minus 260 degrees Fahrenheit and condensed into a liquid. LNG occupies 600 times less volume than in its gaseous state, which allows it to be shipped in cryogenic tankers from remote locations to markets where it is needed. At the receiving terminal, LNG is unloaded and stored until it is vaporized back into natural gas and moved via pipelines to customers.
Headquartered in Italy, Eni S.p.A. is an international company operating in the oil, natural gas, electricity generation, petrochemicals, engineering and construction and oilfield services sectors of the energy industry. The company is active in approximately 70 countries and has more than 76,000 employees. The company's 2004 consolidated net sales from operations of 58,346 million euros generated a net profit of 7,274 million euros.
Sempra LNG, a unit of Sempra Global, oversees LNG project development. Sempra Energy, based in San Diego, is a Fortune 500 energy-services holding company with 2004 revenues of $9.4 billion. The Sempra Energy companies' 13,000 employees serve more than 10 million customers in the United States, Europe, Canada, Mexico, South America and Asia.
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Sempra LNG is not the same company as the utility, SDG&E or SoCalGas, and Sempra LNG is not regulated by the California Public Utilities Commission.